Filing for a tax extension is a common practice, with about 10 million taxpayers traditionally filing extensions each year and this number appears to be increasing. Despite the misconception that filing for an extension may result in an audit, statistics show that this is not the case. Filing for an extension can actually make good tax sense as it allows taxpayers more time to file a complete and accurate return rather than rushing to meet the Tax Day deadline.
By filing for an extension, taxpayers can have until October 15,2024, to submit their returns. This additional time can be helpful in various situations such as ensuring all necessary forms have been received, reviewing the accuracy of the return, or discussing any questions with a tax preparer. With the complexity of some tax situations, taking the time to double-check the return can help avoid costly penalties in the future. There is no need to provide a reason for requesting an extension and it is automatically granted if the rules are followed.
When filing for an extension, taxpayers need to ensure that their extension is postmarked or e-filed by April 15, 2024, to avoid the late-filing penalty. Residents of Maine or Massachusetts have until April 17 to file. It is important to note that an extension is an extension of time to file, not an extension of time to pay. Taxpayers who expect to owe taxes should make a payment with their extension request to avoid interest and penalties later on.
Some taxpayers may be eligible for automatic extensions of time to file without having to submit a request. For example, U.S. citizens or residents living outside of the U.S. or Puerto Rico, active duty military members living outside of the U.S., and taxpayers affected by natural disasters may qualify for additional time to file. It is essential to check the IRS website for specific details and eligibility requirements.
Filing for an extension can be a more efficient option than filing a return with the intention of amending it later. This is because amended returns are still processed manually, resulting in delays. By filing for an extension and submitting a complete and accurate return later, taxpayers can avoid the need for amendments and associated delays. Ultimately, the goal is to ensure that the tax return is complete and correct to avoid any issues with the IRS and to minimize potential penalties or interest charges.
